As GameStop Stalls, Will Regulators Start?

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Bloomberg’s Matt Levine continues to be a tremendous source of insight into the GameStop saga, but one possible response to what has happened, which is set out in one of his must-read articles on this stock’s excellent adventure/bogus journey (take your pick) and buried within the following not-to-be-taken-literally passage, should be treated with caution:

We have discussed before the sort of creaky U.S. rules around who can buy what sorts of risky investments, and I have proposed a simple standard. I call it the “Certificate of Dumb Investment.” Under this standard, anyone can buy diversified low-fee mutual funds to their heart’s content, but to buy dumb stuff—private placements but sure let’s say also volatile meme stocks—you have to go down to the local office of the Securities and Exchange Commission and sign a form saying that you know that what you’re doing is dumb, you know you will probably lose all your money, and you forfeit forever any right to complain. Then you can do whatever dumb thing you want.

Click on the link embedded in Levine’s text to see where he expands (in an article written in 2018) on how his Certificate of Dumb Investment regime would work. Some of this, I reckon (I cannot imagine why) contains just a touch, well, perhaps more than a touch, of hyperbole: “Then you take the form to an SEC employee, who slaps you hard across the face and says ‘really???’ And if you reply ‘yes really’ then she gives you the certificate.”

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Fascist means, green ends

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In ‘What is Fascism?’ (1944), George Orwell complained that the word ‘fascist’ had been applied to so many groups, (including conservatives, socialists, communists and Catholics), beliefs and even species (dogs!) that it had been reduced to something close to meaninglessness. And yet, he observed:

‘Fascism is…a political and economic system. Why, then, cannot we have a clear and generally accepted definition of it?… To say why would take too long, but basically it is because it is impossible to define Fascism satisfactorily without making admissions which neither the Fascists themselves, nor the Conservatives, nor Socialists of any color, are willing to make.’

That was true then, and it’s true in 2021 — except that we should now add some of today’s harder-edged greens to Orwell’s list. A good number of their precursors in interwar Europe would not have been so diffident.

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Counting the Shareholder Out: When the Ruling Class Changes the Rules

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It comes as no surprise that Bloomberg News, which includes a section called Bloomberg Green, also features another called Good Business — a venue dedicated to “sustainable finance and leadership for a changing world.” His presidential campaign aside, Mike Bloomberg tends to get what he pays for.

It’s also not a surprise that Bloomberg journalist, Saijel Kishan, has written a piece for Good Business headlined “How Wrong Was Milton Friedman? Harvard Team Quantifies the Ways.” In this context, the target of the Harvard correction squad is, above all, Friedman’s 1970 article for The New York Times Magazine on shareholder primacy, the one in which, Kishan relates:

Friedman . . . declared that a corporation choosing social responsibility over maximizing profits was practicing socialism — a “fundamentally subversive doctrine,” he called it in 1970. In a free society, Friedman said, “there is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”

Kishan gives herself only a few lines to describe that piece, which may explain why it is unclear whether Friedman was labeling socialism or a “corporation choosing social responsibility” as “fundamentally subversive.” Friedman had no fondness for socialism (#understatement), but in this case, he was referring to “social responsibility,” a notion he thought had implications far beyond the corporate sphere, none of them good.

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The Great Reset: If Only It Were Just a Conspiracy

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Writing for The Spectator US, Ben Sixsmith gets to grips with “the Great Reset” now being proposed by the World Economic Forum (“Davos”).

And yes, despite a name that sounds as if it were conjured up in some of conspiracism’s danker fever swamps, the Great Reset really exists:

“The World Economic Forum, which organizes the annual conference Davos, has launched an initiative called, yes, ‘the Great Reset’. It has its own website.”

Indeed it does.

But, after noting the involvement of “partners” such as Apple, Microsoft, Facebook, IBM, IKEA, Lockheed Martin, Ericsson and Deloitte, Sixsmith doubts whether the Great Reset can be seen, as some like to suggest (even allowing for a bit of hype) as “socialist Left Marxist” or a “global communist takeover plan.”

Fair enough, not least because the Great Reset is, in essence, corporatist, not communist. The participation of companies of the type that Sixsmith mentions is, in reality, the participation of certain members of their senior management, using shareholder funds for purposes that have nothing to do with the bottom line and everything to do with the wielding of power within a system akin to a concert, with the state — if not necessarily the government — acting as the conductor.

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A Useful Pandemic: Davos Launches New ‘Reset,’ this Time on the Back of COVID

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COVID-19 is a bad disease that has been used to breathe new life into bad ideas. And so it comes as no surprise that the World Economic Forum (“Davos”) is deploying the pandemic as an argument for what it labels, with characteristic modesty, “The Great Reset” initiative:

There is an urgent need for global stakeholders to cooperate in simultaneously managing the direct consequences of the COVID-19 crisis. To improve the state of the world, the World Economic Forum is starting The Great Reset initiative.

Even if we pass over the presumption of the reset’s name, this is a small classic of the prose of soft authoritarianism. There is an “urgent need” that must be met. There is to be cooperation and management, the world is to be “improved,” and all of this is to be put in place by “global stakeholders,” — a conveniently vague phrase, with more than a suggestion of democracy bypassed about it.

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Lockdown Lunacies

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COVID-19 is again advancing in Europe, “despite” (I will get to those scare quotes later) earlier lockdowns.

CNBC (from Monday):

European countries are likely to impose more restrictions on public life in the coming days as the number of daily coronavirus infections rises rapidly, analysts said.

France reported 10,569 new cases Sunday (down from more than 13,000 new cases reported the day before), Reuters reported, while the U.K. reported almost 4,000 new cases on Sunday. Italy saw close to 1,000 new infections and Germany reported 1,345 new cases Sunday, and a further 922 cases Monday. Spain has yet to post its weekend case tallies, but reported almost 4,700 new cases Friday.

On Monday, German Health Minister Jens Spahn said rising coronavirus infection numbers in countries like France, Austria and the Netherlands were “worrying” and that Germany would sooner or later import cases from there, Reuters reported. He added that countries like Spain had infection dynamics “that are likely out of control.”

“Despite” because the initial lockdowns were never going to suppress the virus, not in the longer term.

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Markets: Remember, Remember the Third of November

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Writing in the Financial Times on September 1, Robin Wrigglesworth reported that markets are signaling unease about what may lie ahead in the first week of November. It is not so much the election that’s causing agita as the fear that Election Night might not resolve the result. Investors do not appreciate uncertainty, and if everything is still unresolved by, say, late the next day, the only certainty will be uncertainty.

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The Dangers of ‘Stakeholder Capitalism’

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Writing in the Wall Street Journal last week, Andy Puzder took aim at Joe Biden’s embrace of “stakeholder capitalism,” the doctrine now being touted as a replacement for the quaint notion that a company should be run for the benefit of those — the shareholders — who own it. Stakeholder capitalism is a modish name for what is just another expression of corporatism, an old ideology with a sometimes sinister past that, because of the power it gives to the unelected and the unaccountable, will never fall far out of style. That, in this case, it involves playing around with other people’s money only adds to its sleazy appeal.

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The EU’s Slow, Sneaky Attempt to Engineer a Fiscal Union

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There is a certain disreputable genius to how EU summits (or, more accurately, meetings of the EU’s Council, the body made up of the leaders of each member-state, the EU’s president, and its top bureaucrat) are organized. Typically arranged to last just a day or two, the tight timing ensures that talks will run late — so late, in fact, that those participating might agree to anything to grab some sleep. As the EU’s overall direction is, with pauses, forever forward, these long nights can have a way of ending up with another step or more being taken on the path to ever closer union.

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A Benefit Worth (Largely) Preserving

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From CNBC:

Republicans are considering extending the enhanced unemployment insurance benefit at a dramatically reduced level of $400 per month, or $100 a week, through the rest of the year, sources told CNBC.

Congress passed a $600 per week, or $2,400 a month, boost to jobless benefits in March to deal with a wave of unemployment unseen in decades as states shut down their economies to combat the coronavirus pandemic. The policy expires at the end of July as the U.S. unemployment rate stands above 11%, despite two strong months of job growth.

The GOP, which has not made a final decision on how it will craft unemployment insurance in a bill set to be released this week, previously discussed extending the benefit at an additional $200 per week instead of $600. Democrats want to make the $600 per week sum available at least until next year.

There are good arguments to be made for reducing the enhanced benefit from its current level, but a reduction to $100 (or even $200) seems to me like too great a cut too soon.

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